FREE CONSENT

• Section 10 CA : ‘all agreements are contract if they are

made by the free consent of competent parties to contract’.

• Section 13 CA : 2 or more persons are said to consent when

they agreed upon the same thing in the same sense
(consensus ad idem).

• Section 14 : consent is said to be free when it is not caused

by :
1.Coercion – s.15
2.Undue influence- s.16
3.Fraud –s.17
4.Misrepresentation – s.18
5.Mistake – s.21, 22, 23
SECTION 2(i) VOIDABLE
CONTRACT.
• Voidable contract: an agreement which is valid at the
option of the one but not the other.
• The innocent party is given the choice of either
terminate the contract or continue with it.
 1. COERCION
• Section 15: coercion is the committing or threatening to commit
any act forbidden by Penal Code, or the unlawful detaining or
threatening to detain any property to the prejudice of any
person, with intention of causing any person enter into an
agreement.
• **threat/persuading someone to do
something/force/assault/extortion/blackmail
• **eg: pointing a gun at someone head & force to sign an
agreement
• Effect : section 19 – contract is voidable
• Cases :
1.Chin Nam Bee Development Sdn Bhd V Tai Kim Choo.
2.Kesarmal s/o Lethuman Das V Valiappa Chettier
** Kesarmal s/o Lethuman Das
V Valiappa Chettier
• Facts : the transfer of property issued in the presence of two
Japanese Officers during the Japanese Occupation of
Malaysia.
• Held : the transfer was not made with free consent and
voidable.
 2. UNDUE INFLUENCE
Section 16 : a contract is said to be induced by undue
influence when there is subsisting relationship between the
parties where one party is in the position to dominate the
will of the other and he used that position to obtain unfair
advantage over the other.
** element of dominate – one person has power and
influence over s/one else
The relationship may arise when:
1. One party relies on another for advice. For example
fiduciary relationship between trustee and beneficiary,
lawyer and client, a doctor and his patient etc.
2. A person holds real authority over the other. Eg- between
parents and child.
• Effect : section 20 - contract voidable
• Case : Datuk Jaginder Singh and Ors V Tara Rajaratnam
 3. Fraud
 Section 17: fraud includes any of the following acts committed by a party
to a contract, with intent to deceive another party, or to induce him to
enter a contract.**cheating/criminal deception intended to gain financial
or personal gain/generate a profit
1. Suggestion as to fact which is not true (wrong statement)
Senanayake v Annie Yeo
Facts: P bought shares from the D’s firm because she relied on the D’s
statement that the firm was good and potential firm.
An untrue statement was made about the good potential of a firm
Held: the statement was not true. It was fraud to deceive others into buying
the shares.
2. Active concealment of fact by one having knowledge of the fact
Eg : if Ali knows that Boy’s land contains gold and he conceal this fact from
Boy, hoping that he can buy the land at a lower price - fraud
3. Promise made without intention to perform
4. Any act fitted to deceive
5. Any act or omission which the law specifically declares to be fraudulent
 4. Misrepresentation – S.18
Misrepresentation includes:
1.Positive assertion that is not true, through he believes it to be
true
2.Any breach of duty, without intention to deceive, give an
advantage to the person committing it by misleading the other to
his prejudice..
3.Causing, however innocently a party to an agreement to make a
mistake.

**untrue/ wrong statement/false/ misleading statement

Conditions to be fulfilled in order to prove misrepresentation:
1. There must be a positive false statement : Keates V Lord Cardogan
Defendant let the plaintiff a house that the defendant knew was in
ruinous condition. The defendant kept silence.
Held : no misrepresentation because there is no positive statement.

2. The misrepresentation must be one of fact : Bisset V Wilkinson

W ( the buyer)agreed to buy certain land for sheep farming. W relied
on B statement that the land would carry 2000 sheep. The land in fact
could carry less than the said amount.
Held : No misrepresentation. It was Bisset's opinion because:
i. Bisset was never a sheep farmer
ii.No person had ever carried on sheep on the land.

3. The statement was addressed to the party mislead

4. The representation must induce the contract
 5. Mistake
i. Mistake of fact
a. Mutual mistake - Section 21 - the agreement is void.
Mistake as to identity of subject matter - Raffles V Wilchelhaus
Mistake as to existence of subject matter -Coutier V Hastie
b. unilateral mistake - Section 23 - valid
Case : Tamplin V James
But, exceptions – contract voidable :
1. Mistake one party as to terms - Taylor V Johnson
2. Mistake as to document – Awang b Omar V Hj Omar & ANOR
3. Mistake of identity – Ingram V Little
ii.Mistake of law
Section 22 : mistake as to any law in force in Malaysia – a contract is not
Voidable. Means contract is valid.
Mistake as to law not in force in Malaysia – same mistake as fact. Means,
for foreign law – contract is void.
QUESTIONS
• Man was forced to enter into a contract to sell his bungalow
to Sam for RM200,000. The original price of the house was
RM500,000. During the execution of the contract Man was
threatened by Sam’s friends who are very rude and
threatening to use weapon to harm him. Advise Man as to
validity of the contract.
Suggested answer
ISSUE:
PL:
•Section 10 CA 1950 : ‘all agreements are contract if they are made by the free consent of competent parties to
contract’.
•Section 13 CA 1950 : 2 or more persons are said to consent when they agreed upon the same thing in the same
sense ( consensus ad idem ).
•Section 14 CA 1950 : consent is said to be free when it is not caused by Coercion
•Section 15: coercion is the committing or threatening to commit any act forbidden by Penal Code, or the unlawful
detaining or threatening to detain any property to the prejudice of any person, with intention of causing any person
to enter into an agreement.
•Effect: Section 19 - contract is voidable.
•Voidable contract: Section 2(i) CA 1950 : an agreement which is enforceable by law at the option of the one but not
the other. The innocent party is given the choice of either rescind/terminate the contract or continue with it.
•Kesarmal s/o Lethuman Das V Valiappa Chettier
•Facts: the transfer of property issued in the presence of two Japanese Officers during the Japanese Occupation of
Malaysia. Held: the transfer was not made with free consent and voidable.
•Chin Nam Bee Development Sdn Bhd V Tai Kim Choo
•Respondents purchased houses to be constructed by appellant. They signed a sale and purchase agreement valued
at RM29,500. Later the respondents were forced to pay an additional RM4000 under a threat by the appellant to
cancel the respondents’ booking for their houses. Held: the payment was not voluntary but had been made under
threat / coercion and thus was recoverable.
APPLICATION
CONCLUSION
• ANY QUESTION ?????